Monday, November 17, 2008

Along with virtually everyone else I've talked to about this, I've been deeply distressed by the socialistic turn of the United States government in the last many years, but most especially as evidenced by the unprecedented corporate bail-outs of the past few months.

Now comes someone who wants us to view things differently. And I'm inclined to believe him.

Gary Moore has a degree in political science from the University of Kentucky. After serving as an artillery officer, he became a senior vice president of investments at Paine Webber during the 1980s. He then thought about attending seminary but soon discovered that seminaries no longer teach about the moral dimensions of managing this world’s wealth, despite them being a favorite topic of Moses, Jesus, and the church fathers.

He began informal study of the subject and later founded The Financial Seminary, a non-profit ministry, to build bridges between the financial and moral communities. He also founded his own investment firm as “counsel to ethical and spiritual investors.” Since then, he has advised some of America’s well-known ministries, churches, banks, and individual investors, while authoring many articles about integrating religion or spirituality and ethics with personal financial management and political economy.

And Moore writes:

[I] was mentored by the Rhodes Scholar turned legendary mutual fund manager Sir John Templeton, about whom [I have written] two books.

Mr. Templeton was not only respected for his unusual gifts for making money but also as one of the most devout and ethical men on Wall Street. Mr. Templeton died last year. But he had always celebrated Thanksgiving by sending greetings and presents for that day as he believed gratitude and generosity are absolutely crucial for enriching our worldviews and then our lives. That also allowed him to keep Christmas spiritual and focused on God’s Gift to us. It is in that spirit--and in memory of Mr. Templeton--that The Financial Seminary sent this [article] . . . so it might be shared with [others]. . . .

As in the ancient story [Numbers 13], Mr. Templeton was famous for focusing on the milk and honey in the Promised Land while the majority focused on the giants.

During the early eighties, people thought inflation would impoverish us; but Mr. Templeton predicted a soaring stock market. During the early nineties, people thought the federal debt was earthshaking; but Mr. Templeton predicted “the twenty most prosperous years in history” for our world. Yet he was very much a realist. In the late nineties, he predicted that if you invested in the Dow Jones, you would be lucky to break even in ten years, which has also been prophetic. Being a serious student of the Bible, Mr. Templeton knew fat years and lean years are simply the order of things [Genesis 41]. Yet God knows we are again seeing giant-sized problems and are again feeling rather hopeless.

Our natural tendency to focus on our challenges can be demonstrated by my holding a piece of paper aloft and asking what you see. You’ll probably respond “a sheet of paper.” But if I take a magic marker, place a dot in the middle and ask again, you’ll likely reply you see “a dot.” Of course, what you really see is a very large piece of paper with a relatively small dot. That’s precisely why our media focus on the very small number of plane crashes rather than the much larger number of planes that arrive safely each day. Unfortunately, after a while, that focus on the negative becomes a habit and begins to shape our worldview, including how we see the economy and our finances.

For example, let me ask if you’ve ever seen the size of our federal debt. . . . Virtually all of us have, of course. There’s even a billboard about it on Times Square that we often see updated on the evening news. It’s now about $10 trillion, which sounds so giant-sized it can frighten any of us. But [it's like the dot on the paper. N]ow let me ask this: Have you even once seen the size of our nation’s assets? . . . Very, very few of us have. Yet the same people who estimate the federal debt also estimate our nation’s assets, which are much, much larger. I’ll get to those assets in a moment. [They are like the paper surrounding the dot.]

In the Garden of Eden the first thing the serpent did was create in Adam and Eve a sense of scarcity. "Did God really say you must not eat any of the fruit in the garden?" (Gen. 3:1).

God did say--commanded, in fact--that they "may freely eat any fruit in the garden except fruit from the tree of the knowledge of good and evil. If you eat of its fruit, you will surely die" (Gen. 2:16). The serpent's trick, then as now, is to turn this staggering abundance and gracious protection into frightening scarcity and bullying deprivation, the stinginess of a despot.

God had a divine plan to deal with our human tendencies to focus on the economic negative. It is called the Book of Numbers. It seems a boring book but it’s a crucial one as it was essentially summarized by St. Paul when he counseled us to “put your minds on the things that are good...that deserve praise” [Philippians 4:8].

You see, it’s always been true that to know God, who is Ultimate Reality, you have to know not only our economic challenges but also our blessings.

By today’s standards, the Hebrews didn’t have many economic blessings. But they did have what economists call “human capital,” or people with rudimentary skills. So God had Moses number, or count, those blessings.

We, too, need to carefully consider the “overwhelming evidence” of our “overflowing abundance” before we can cross over to our own Promised Land. But first, let’s put our blessings into the larger perspective, both historically and globally, just so we know how very, very thankful we should be.

Economic historians tell us that at the time of Christ, the average human lived on the equivalent of about $600 per year. Due to limited diet, poor health care and seemingly endless war, Jesus was relatively old when he was crucified at thirty-three. At the end of the first millennium, people around the world were still living on the same $600 per year. And as hard as it is for us to imagine, when the Pilgrims and Native Americans celebrated the first Thanksgiving, they were living on even less.

Importantly, while historians tell us the American economy has seen its share of fat years and lean years since the first thanks/giving season, our economy has been growing at a fairly steady 2% per year for the past two hundred years. Yet, always remember, a minister named Thomas Malthus famously predicted back then that we would have starved long ago as food production could not keep up with population growth. As with most worldly-minded economists, the good reverend forgot that people are not simply mouths to feed but are created in the image of God to be co-creators. That’s basically why economics is called “the dismal science” and we Christians need to practice “spiritual economics.”

From a global perspective, the average human now lives on less than $8,000 a year.The Economist magazine recently estimated the average net worth of a human being is less than $2,500. Let me repeat those realities: Today, the average person in our world lives on less than $8,000 and has a net worth of less than $2,500.

Now, let’s number our blessings. As to income, the average American today lives on nearly $50,000, or nearly one-hundred times what people did at the time of Christ.

In its most recent report, which is very rarely seen, but a small, relevant portion of which is available here, The Office of Management and Budget in the White House estimated that America’s total wealth is $120 trillion, with a “T.” Subtract the $8 trillion America owes other nations and our net wealth is an astounding $112 trillion. Yes, that figure has fallen some in 2008, as it always does during recessions. It may fall even further, as it did from 2000 to 2002. Still it is an amazing number.

The report says the average American enjoys about $370,000 of wealth. No, what we call “private wealth” or our personal wealth, isn’t that large. It’s about half of that. But you need to add the value of your portion of [your] church, for example--a value that is in what economists call the “independent sector” of the economy. And you need to add your portion of the roads that [permit you to travel from place to place and that enable shipping companies to transport goods from factories to your favorite retailer . . . and from the retailer to your home. --These are all resources that] are in the “public sector.”

All that wealth--plus our parks, schools, military, libraries, foundations, Red Cross and so on--is very real wealth that enriches us each day. Yet we seldom think about it as we focus on the twin giants of deficits and debt.

So I hope that you’ll open a copy of the OMB report, study it, and, each time someone talks about the huge deficit our federal government will run this year and next, and it will, to stimulate us out of recession, or the size of our federal debt, you will put those giants into perspective by sharing the size of our assets. There is no need to argue the deficit or our debt “doesn’t matter.” They do. And they will matter more as the boomers retire, particularly if our wars continue. Guns and butter are expensive. Difficult stewardship decisions must be made. So pray for our leaders. But as the story of the Hebrews indicates, there is never reason for the children of an almighty God to feel “small as grasshoppers” when contemplating such giants.

In fact, it will surprise those who’ve lived in fear of the federal debt, but the White House report says that as a percentage of our national wealth, the federal debt has actually been in decline for nearly fifty years. Yes, as reported nearly every day, the nominal size of the debt has been growing. Yet as has rarely been reported, the size of our assets has been growing even faster, hence the increase in our net wealth. The same pattern has been repeated in households so household wealth is also at an all-time record despite the much reported increase in personal debt. As a percentage of our nation’s assets, the federal debt is only 6.8%, down from 10.4% in 1960. That is, if the federal debt was a mortgage and our American home was valued at $100,000, our mortgage would be $6,800.

Still, economists who study human nature tell us today’s realities amount to little if people falsely assume they will not have enough tomorrow. They will still hoard what they have, reducing both giving for today’s challenges and investing for the future. They thereby turn their worst fears into future realities, just as the Hebrews did when their fear of the giants, and not the giants themselves, kept them out of the land that God had promised for over four hundred years.

So it seems very timely to share with you what might have been Mr. Templeton’s last and most important economic prediction. Yes, he told the financial media our stock market would likely be flat during this decade as he knew our economy was running low on “spiritual capital,” or the virtues of thrift, prudence, patience, trust and so on. But understanding the somewhat cyclical nature of economic reality, he also knew that would pass, however painfully. So he also asked [me] to co-author an article for Equities magazine about why the Dow Jones Industrial Average might rise to the one million level by the year 2100. Yes, he saw milk and honey in our future even after numbering the giants.

So Mr. Templeton left us one sure-fired investment recommendation for sharing in that milk and honey rather than wandering the dry desert of despair when he counseled:

In all my years of investment counseling, there was only one investment which never proved faulty, and that was tithing--giving at least 10% of your income to churches and charities. In all my history, I have never seen a family who tithed for as long as ten years that didn’t become both prosperous and happy. That is the best investment anyone can select.

Facing giants in the midst of a land flowing with milk and honey . . .

Along with virtually everyone else I've talked to about this, I've been deeply distressed by the socialistic turn of the United States government in the last many years, but most especially as evidenced by the unprecedented corporate bail-outs of the past few months.

Now comes someone who wants us to view things differently. And I'm inclined to believe him.

Gary Moore has a degree in political science from the University of Kentucky. After serving as an artillery officer, he became a senior vice president of investments at Paine Webber during the 1980s. He then thought about attending seminary but soon discovered that seminaries no longer teach about the moral dimensions of managing this world’s wealth, despite them being a favorite topic of Moses, Jesus, and the church fathers.

He began informal study of the subject and later founded The Financial Seminary, a non-profit ministry, to build bridges between the financial and moral communities. He also founded his own investment firm as “counsel to ethical and spiritual investors.” Since then, he has advised some of America’s well-known ministries, churches, banks, and individual investors, while authoring many articles about integrating religion or spirituality and ethics with personal financial management and political economy.

And Moore writes:

[I] was mentored by the Rhodes Scholar turned legendary mutual fund manager Sir John Templeton, about whom [I have written] two books.

Mr. Templeton was not only respected for his unusual gifts for making money but also as one of the most devout and ethical men on Wall Street. Mr. Templeton died last year. But he had always celebrated Thanksgiving by sending greetings and presents for that day as he believed gratitude and generosity are absolutely crucial for enriching our worldviews and then our lives. That also allowed him to keep Christmas spiritual and focused on God’s Gift to us. It is in that spirit--and in memory of Mr. Templeton--that The Financial Seminary sent this [article] . . . so it might be shared with [others]. . . .

As in the ancient story [Numbers 13], Mr. Templeton was famous for focusing on the milk and honey in the Promised Land while the majority focused on the giants.

During the early eighties, people thought inflation would impoverish us; but Mr. Templeton predicted a soaring stock market. During the early nineties, people thought the federal debt was earthshaking; but Mr. Templeton predicted “the twenty most prosperous years in history” for our world. Yet he was very much a realist. In the late nineties, he predicted that if you invested in the Dow Jones, you would be lucky to break even in ten years, which has also been prophetic. Being a serious student of the Bible, Mr. Templeton knew fat years and lean years are simply the order of things [Genesis 41]. Yet God knows we are again seeing giant-sized problems and are again feeling rather hopeless.

Our natural tendency to focus on our challenges can be demonstrated by my holding a piece of paper aloft and asking what you see. You’ll probably respond “a sheet of paper.” But if I take a magic marker, place a dot in the middle and ask again, you’ll likely reply you see “a dot.” Of course, what you really see is a very large piece of paper with a relatively small dot. That’s precisely why our media focus on the very small number of plane crashes rather than the much larger number of planes that arrive safely each day. Unfortunately, after a while, that focus on the negative becomes a habit and begins to shape our worldview, including how we see the economy and our finances.

For example, let me ask if you’ve ever seen the size of our federal debt. . . . Virtually all of us have, of course. There’s even a billboard about it on Times Square that we often see updated on the evening news. It’s now about $10 trillion, which sounds so giant-sized it can frighten any of us. But [it's like the dot on the paper. N]ow let me ask this: Have you even once seen the size of our nation’s assets? . . . Very, very few of us have. Yet the same people who estimate the federal debt also estimate our nation’s assets, which are much, much larger. I’ll get to those assets in a moment. [They are like the paper surrounding the dot.]

In the Garden of Eden the first thing the serpent did was create in Adam and Eve a sense of scarcity. "Did God really say you must not eat any of the fruit in the garden?" (Gen. 3:1).

God did say--commanded, in fact--that they "may freely eat any fruit in the garden except fruit from the tree of the knowledge of good and evil. If you eat of its fruit, you will surely die" (Gen. 2:16). The serpent's trick, then as now, is to turn this staggering abundance and gracious protection into frightening scarcity and bullying deprivation, the stinginess of a despot.

God had a divine plan to deal with our human tendencies to focus on the economic negative. It is called the Book of Numbers. It seems a boring book but it’s a crucial one as it was essentially summarized by St. Paul when he counseled us to “put your minds on the things that are good...that deserve praise” [Philippians 4:8].

You see, it’s always been true that to know God, who is Ultimate Reality, you have to know not only our economic challenges but also our blessings.

By today’s standards, the Hebrews didn’t have many economic blessings. But they did have what economists call “human capital,” or people with rudimentary skills. So God had Moses number, or count, those blessings.

We, too, need to carefully consider the “overwhelming evidence” of our “overflowing abundance” before we can cross over to our own Promised Land. But first, let’s put our blessings into the larger perspective, both historically and globally, just so we know how very, very thankful we should be.

Economic historians tell us that at the time of Christ, the average human lived on the equivalent of about $600 per year. Due to limited diet, poor health care and seemingly endless war, Jesus was relatively old when he was crucified at thirty-three. At the end of the first millennium, people around the world were still living on the same $600 per year. And as hard as it is for us to imagine, when the Pilgrims and Native Americans celebrated the first Thanksgiving, they were living on even less.

Importantly, while historians tell us the American economy has seen its share of fat years and lean years since the first thanks/giving season, our economy has been growing at a fairly steady 2% per year for the past two hundred years. Yet, always remember, a minister named Thomas Malthus famously predicted back then that we would have starved long ago as food production could not keep up with population growth. As with most worldly-minded economists, the good reverend forgot that people are not simply mouths to feed but are created in the image of God to be co-creators. That’s basically why economics is called “the dismal science” and we Christians need to practice “spiritual economics.”

From a global perspective, the average human now lives on less than $8,000 a year.The Economist magazine recently estimated the average net worth of a human being is less than $2,500. Let me repeat those realities: Today, the average person in our world lives on less than $8,000 and has a net worth of less than $2,500.

Now, let’s number our blessings. As to income, the average American today lives on nearly $50,000, or nearly one-hundred times what people did at the time of Christ.

In its most recent report, which is very rarely seen, but a small, relevant portion of which is available here, The Office of Management and Budget in the White House estimated that America’s total wealth is $120 trillion, with a “T.” Subtract the $8 trillion America owes other nations and our net wealth is an astounding $112 trillion. Yes, that figure has fallen some in 2008, as it always does during recessions. It may fall even further, as it did from 2000 to 2002. Still it is an amazing number.

The report says the average American enjoys about $370,000 of wealth. No, what we call “private wealth” or our personal wealth, isn’t that large. It’s about half of that. But you need to add the value of your portion of [your] church, for example--a value that is in what economists call the “independent sector” of the economy. And you need to add your portion of the roads that [permit you to travel from place to place and that enable shipping companies to transport goods from factories to your favorite retailer . . . and from the retailer to your home. --These are all resources that] are in the “public sector.”

All that wealth--plus our parks, schools, military, libraries, foundations, Red Cross and so on--is very real wealth that enriches us each day. Yet we seldom think about it as we focus on the twin giants of deficits and debt.

So I hope that you’ll open a copy of the OMB report, study it, and, each time someone talks about the huge deficit our federal government will run this year and next, and it will, to stimulate us out of recession, or the size of our federal debt, you will put those giants into perspective by sharing the size of our assets. There is no need to argue the deficit or our debt “doesn’t matter.” They do. And they will matter more as the boomers retire, particularly if our wars continue. Guns and butter are expensive. Difficult stewardship decisions must be made. So pray for our leaders. But as the story of the Hebrews indicates, there is never reason for the children of an almighty God to feel “small as grasshoppers” when contemplating such giants.

In fact, it will surprise those who’ve lived in fear of the federal debt, but the White House report says that as a percentage of our national wealth, the federal debt has actually been in decline for nearly fifty years. Yes, as reported nearly every day, the nominal size of the debt has been growing. Yet as has rarely been reported, the size of our assets has been growing even faster, hence the increase in our net wealth. The same pattern has been repeated in households so household wealth is also at an all-time record despite the much reported increase in personal debt. As a percentage of our nation’s assets, the federal debt is only 6.8%, down from 10.4% in 1960. That is, if the federal debt was a mortgage and our American home was valued at $100,000, our mortgage would be $6,800.

Still, economists who study human nature tell us today’s realities amount to little if people falsely assume they will not have enough tomorrow. They will still hoard what they have, reducing both giving for today’s challenges and investing for the future. They thereby turn their worst fears into future realities, just as the Hebrews did when their fear of the giants, and not the giants themselves, kept them out of the land that God had promised for over four hundred years.

So it seems very timely to share with you what might have been Mr. Templeton’s last and most important economic prediction. Yes, he told the financial media our stock market would likely be flat during this decade as he knew our economy was running low on “spiritual capital,” or the virtues of thrift, prudence, patience, trust and so on. But understanding the somewhat cyclical nature of economic reality, he also knew that would pass, however painfully. So he also asked [me] to co-author an article for Equities magazine about why the Dow Jones Industrial Average might rise to the one million level by the year 2100. Yes, he saw milk and honey in our future even after numbering the giants.

So Mr. Templeton left us one sure-fired investment recommendation for sharing in that milk and honey rather than wandering the dry desert of despair when he counseled:

In all my years of investment counseling, there was only one investment which never proved faulty, and that was tithing--giving at least 10% of your income to churches and charities. In all my history, I have never seen a family who tithed for as long as ten years that didn’t become both prosperous and happy. That is the best investment anyone can select.